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General Information

Course ID (CB01A and CB01B)
ACCTD001B
Course Title (CB02)
Financial Accounting II
Course Credit Status
Credit - Degree Applicable
Effective Term
Fall 2021
Course Description
The primary objective of this course is to help students learn how accounting meets the information needs of various users by developing and communicating information that is used in decision-making. Accordingly, the expected student outcome is the demonstration that the student can read, analyze and interpret external financial statements, including corporate and partnership financial statements.
Faculty Requirements
Course Family
Not Applicable

Course Justification

This course is a major preparation requirement in the discipline of Accounting/Business for several CSU's and UC. This course belongs on the Accounting Certificate of Achievement and the Accounting A.A. Degree. The course is the second Financial Accounting course in a sequence of three courses in Accounting intended to provide the student who has successfully completed Financial Accounting I (ACCT D001A) with the ability to prepare, read and interpret corporate financial statements, analyze debt and equity for a firm and explain accounting for sole proprietorships, partnerships and corporations.

Foothill Equivalency

Does the course have a Foothill equivalent?
Yes
Foothill Course ID
ACTG F001B

Course Philosophy

Formerly Statement

Course Development Options

Basic Skill Status (CB08)
Course is not a basic skills course.
Grade Options
  • Letter Grade
  • Pass/No Pass
Repeat Limit
0

Transferability & Gen. Ed. Options

Transferability
Transferable to both UC and CSU
C-IDArea(s)StatusDetails
ACCTAccountingApprovedACCT D001A & ACCT D001B required for C-ID ACCT 110

Units and Hours

Summary

Minimum Credit Units
5.0
Maximum Credit Units
5.0

Weekly Student Hours

TypeIn ClassOut of Class
Lecture Hours5.010.0
Laboratory Hours0.00.0

Course Student Hours

Course Duration (Weeks)
12.0
Hours per unit divisor
36.0
Course In-Class (Contact) Hours
Lecture
60.0
Laboratory
0.0
Total
60.0
Course Out-of-Class Hours
Lecture
120.0
Laboratory
0.0
NA
0.0
Total
120.0

Prerequisite(s)

ACCT D001A or ACCT D01AH

Corequisite(s)

Advisory(ies)

Limitation(s) on Enrollment

(Not open to students with credit in the Honors Program related course.)

Entrance Skill(s)

General Course Statement(s)

Methods of Instruction

Lecture and visual aids

Discussion of assigned reading

Discussion and problem solving performed in class

In-class exploration of Internet sites

Quiz and examination review performed in class

Homework

Guest speakers

Collaborative learning and small group exercises

Collaborative projects

Assignments

  1. Reading
    1. Reading from text
    2. Reading from current business publications
  2. Written and Oral Communications
    1. Written/computer homework assignments to include the preparation of the statement of cash flows and accounting entries and financial statement preparation involving the issuance of equity and debt.
    2. Oral presentation and class participation
  3. Group Work
    1. Solve qualitative and quantitative business problem concepts
    2. Discuss current readings where accounting and business concepts apply.
    3. Analyze case studies and/ or work on projects
  4. Computer Assignments
    1. Problem solving activity using spreadsheet software
    2. Prepare and edit document spreadsheet or word processing software

Methods of Evaluation

  1. Written and problem-solving examinations and quizzes to include comprehension of the preparation of the statement of cash flows and the recording of equity and debt issuance including their corresponding financial statement presentation
  2. Group projects and class participation to include quantitative and qualitative problem-solving demonstrating ability to apply and communicate course concepts
  3. Comprehensive final examination to include problem-solving, analytics, as well as essay and/or short-answer questions that requires students to summarize, integrate, and critically analyze and apply concepts examined throughout the course
  4. Computerized accounting homework and projects to evaluate the ability to critically analyze, apply, and synthesize course materials

Essential Student Materials/Essential College Facilities

Essential Student Materials: 
  • None.
Essential College Facilities:
  • None.

Examples of Primary Texts and References

AuthorTitlePublisherDate/EditionISBN
Warren, Reeve, and Duchac, Accounting, 26th ed, Cengage Learning, Mason, OH, 2016.
Weygandt, Kimmel, & Kieso, Accounting Principles, 12th ed, Wiley Publishing, Danvers, MA, 2015.

Examples of Supporting Texts and References

AuthorTitlePublisher
Current Business and Financial Publications
Annual Reports of various corporations

Learning Outcomes and Objectives

Course Objectives

  • Recognize accounting's role in society and how accounting meets the information needs of investors, creditors, regulatory agencies and taxing authorities.
  • Analyze fundamental business concepts, how businesses operate and how accounting serves them.
  • Analyze fundamental accounting concepts underlying financial statements
  • Evaluate the uses and limitations of financial statements
  • Evaluate the usefulness of information produced by an accounting system and how it is directly related to that system's design.
  • Analyze ethical issues within the Accounting/Business framework.
  • Define and explain the conceptual framework of accounting

CSLOs

  • Demonstrate a knowledge of the users of accounting information and forms or business ownership, risks and capitalization of each and prepare, analyze and evaluate the financial structure of a firm using corporate financial statements (and include the statement of cash flows).

  • Analyze and evaluate the capitalization of a firm using debt and equity and apply net present value methodology to the analysis.

Outline

  1. Recognize accounting's role in society and how accounting meets the information needs of investors, creditors, regulatory agencies and taxing authorities.
    1. Identify types of decisions made by regulatory agencies and taxing authorities make
    2. Describe how information sources can be used to learn more about the nature of the entity's business
    3. Identify some of the differences between the objectives of tax accounting and financial accounting
    4. Identify and discuss differences between taxable income and financial accounting income
    5. Explain how a tax return is actually a special version of the income statement
    6. Explain the nature and purpose of generally accepted accounting principles (GAAP)
    7. Explain the nature and purpose of International Financial Reporting Standards (IFRS)
  2. Analyze fundamental business concepts, how businesses operate and how accounting serves them.
    1. Classify business transactions into operating, investing, and financing activities
    2. Describe the key differences in the financial statements of merchandisers, manufacturers, non-financial service companies and financial service companies
    3. Explain how these differences reflect the operating, investing, and financing activities of each type of entity
    4. Explain and analyze the effects of raising money for a corporation through debt and equity
    5. Compute value utilizing net present value concepts in debt instruments
    6. Account for stock and bond transactions on the appropriate financial statement
  3. Analyze fundamental accounting concepts underlying financial statements
    1. Recognize the elements of, the relationships among, and the accounting concepts underlying the primary financial statements
    2. Distinguish among the following valuation methods: Historical cost, current cost, current market value, and the present value of cash flows
    3. Identify the generally accepted valuation method for each of the major asset and liability accounts
    4. Describe how the balance in each major asset, liability, owners' equity, revenue, and expense account is calculated (e.g., accounts receivable and depreciation expense)
    5. Prepare, link and analyze the related financial statements - statement of cash flows, balance sheet, income statement, and statement of retained earnings
    6. Classify cash receipts and cash payment transactions as well as significant non-cash transactions into the appropriate statement of cash flow activity
    7. Explain the valuation and reporting of current liabilities, estimated liabilities, and other contingencies
    8. Identify and illustrate issues relating to long-term asset acquisition, use, cost

      allocation, and disposal
    9. Distinguish between capital and revenue expenditures
    10. Identify and illustrate issues relating to long-term liabilities, including issuance,

      valuation, and retirement of debt(including the time value of money)
    11. Identify and illustrate issues relating to stockholders’ equity, including issuance,

      repurchase of capital stock, and dividends
    12. Explain the importance of operating, investing and financing activities reported in the Statement of Cash Flows
  4. Evaluate the uses and limitations of financial statements
    1. Interpret company activity, profitability, liquidity and solvency through selection and

      application of appropriate financial analysis tools
    2. Explain how inventories and accounts receivable can be mismanaged
    3. Describe how a manager can use financial statement analysis to monitor and control inventories and accounts receivable
    4. Explain the relationship between net income and cash flows
    5. Discuss liquidity problems and bankruptcy of highly profitable, fast growing companies
    6. Identify several limitations of the financial statements found in the annual report
  5. Evaluate the usefulness of information produced by an accounting system and how it is directly related to that system's design.
    1. Identify the strengths and weakness of an internal control system
    2. Describe the attributes of an effective and efficient internal control system
    3. Identify the strengths and weakness and ways to improve an internal control system
    4. Use spreadsheets to solve accounting problems
  6. Analyze ethical issues within the Accounting/Business framework.
    1. Analyze and discuss ethical issues throughout the business cycle
    2. Analyze and discuss current accounting topics in light of ethical issues
  7. Define and explain the conceptual framework of accounting
    1. Identify the key items of the conceptual framework
    2. Describe the basic objectives of financial reporting
    3. Discuss the qualitative characteristics of accounting information and elements of financial statements
    4. Identify basic assumptions used by accountants
    5. Identify the basic principles of accounting
    6. Identify the two constraints in accounting
    7. Explain the accounting principles, objectives, and assumptions used in International Financial Reporting Standards (IFRS).
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